It’s no secret that the holidays can be a stressful time of year.
Although it can be lovely to finally get the whole family together again (maybe you can finally finish that endless game of Risk you started six years ago...), that often comes with a lot of baggage, and we’re not talking about the suitcases you’ve packed.
How many times can you tell your mother-in-law that her pumpkin pie is the best? How long do you have to politely smile at Uncle Joey’s ever-more-extreme political views?
And for those of us bold enough to travel, there are a whole host of other sources of anxiety. Will you miss your flight? Will your luggage? Will your kids, or they about to embark on a Kevin McAllister Christmas adventure?
No matter your holiday activities, most of us can agree that one of the most stressful parts of this most joyful of seasons is the toll it takes on our bank accounts.
Every year, holiday spending increases and every year, Canadians find it has gotten out of control and wish they could spend less and save more.
Most of us tend to agree: it’s not the material gifts that make up the magic of the holiday spirit but the things we are able to experience together.
And yet, most of us still get caught up in the rat race of holiday shopping extravaganza.
How do you enjoy the holidays without breaking the bank? If you look around the internet these days, you’ll find a lot of advice articles telling you to start saving months in advance.
That’s all well and good (and great advice), but we’re no longer months in advance and the people who need the most help surviving holiday spending are those of us who have not been squirrelling away since January.
We want to turn this holiday season into an opportunity for you not just to survive this year’s madness but to lay the groundwork to build positive financial habits that will stay with you past the season and for years to come.
You just need to get started, and we’re here to help. In this article we’re going to show you how to:
- Create a simple holiday budget you can stick to
- Automate your savings
- Track your spending
- Adjust your budget to better fit your habits
How to make a holiday budget
What makes finances stressful during the holidays is that we're afraid that small indulgences will make us spin out of control. Creating a budget is the first step to staying in control so you can spoil your niece without regretting your spending come January.
Here are the keys to making a holiday budget that you can stick to.
Start planning now
Whether “now” is in January or in November, it doesn’t matter. The first key is to stop thinking it’s too late to do anything.
There are a lot of different tools that you can use to help you create a budget: you can do it with pen and paper, you can use your favourite app. Here, we’re going to use spreadsheets. They’re extremely flexible, accessible, easy-to-use and can do remarkably sophisticated things (we won’t need to for a Christmas budget…). Plus! If you use Google Sheets, you can take it on your phone with you wherever you go.
Automate your savings
One of the best ways to build a Christmas fund is to make your savings automatic. When you automate your savings, you never have to think about it.
There are several ways for you to put your savings on autopilot.
First, you can set up a recurring transfer from your chequing account to your savings account. You can time that transfer with your paycheques so every time you get paid, that money gets automatically transferred into your savings account.
Another way you can automate your savings that is growing in popularity is through spare change rounding up apps.
With Envision Financial, you don’t need to sign up for a separate app: with BIGChange, you can automatically transfer money into your savings account every time you use your debit card to make a purchase (you can also use BIGChange to pay down your loans, pay off your mortgage or give to charity).
Another benefit of the program is that we will match your BIGChange contributions for the first three months, up to $30 a month to help you get started.
Who do you need to buy gifts for?
There’s always someone you forget, isn’t there? When you stop making the list in your head and actually put it down in writing, you curb your chance of starting a blood feud because you once again forgot about cousin Vinny.
Think outside your immediate family circle, too: a lot of people buy gifts for their teachers and service providers they see regularly, like their hairdresser and massage therapist.
Does your work do a gift exchange? Do you buy presents for your friends? Does your sister have a new partner that you’re eager to welcome to the family?
Here’s an example of what your gift list can look like in a Google spreadsheet.
Next to each name, divvy up your total budget and, as you buy your gifts, record how much you actually spent.
If grandpa’s gift goes over budget, you can make up for it by borrowing money somewhere else on this list. Your goal is to keep that bottom total the same.
Don’t forget additional expenses
Managing a budget for presents is one thing. Not blowing your budget on food and drinks and treats is a different story.
So when you’re building your budget, think about those additional expenses. Are you going to do Santa pictures? That’s easily $30. What about all those cards, the wrapping paper, the tape?
Are you going to buy new decorations this year?
Think also about the activities you tend to do or the ones you’re hoping to be able to get to.
Finally, think about the extra food you’re going to need to buy and don’t forget about your New Year’s celebrations.
If you started a spreadsheet for your gifts, add these expenses to it. As you can see, we’ve broken down the miscellaneous and food categories further.
Start shopping now
Once you’ve built a list for everyone and everything, it’s a lot easier to think about what a great gift would be rather than rushing out at the last minute, hoping something catches your eye.
In your spreadsheet, add a column for ideas.
Shopping early allows you to take advantage of the best clearances and sales. The most popular for you to get dealz (with a z) is Black Friday and Cyber Monday. If you plan long enough in advance, you’ll be able to take advantage of Amazon’s self-made shopping holiday, Prime Day, too.
How to stick to your holiday budget
You’ve made a budget, congratulations! That’s something you can feel great about and it’s the first step to enjoying the holidays.
The second step is sticking to your new budget. Here are a few tricks to help you.
Schedule a regular check-in
Here’s the first trick: decide how often you’re going to check in on it and put that task into your calendar. If you are able to set aside 15 minutes a day to it, that’s great. Try making, at the very least, a weekly appointment with yourself.
Checking your budget regularly is an easy victory that will help energize you, so set yourself up for success by scheduling a frequency you can maintain.
Here are some other ways that can help you stick to your budget and even lower some of the costs.
Do a gift exchange
If you look at our budget spreadsheet, you’ll see that gifts for extended family (mom, dad, in-laws, sister, grandparents) add up to $225. That’s with a small budget ($50 per individual) and a small family.
What if you have more siblings, and your partner has their siblings or you have aunts and uncles and cousins and nephews and nieces?
Or what if you do have a small family but this was a difficult year financially?
Why not propose a Secret Santa? Instead of having to buy six gifts, you only have to buy one. If you’re feeling overwhelmed at the sheer volume, chances are you’re not alone.
Go in on a gift
Found the perfect gift but it’s outside your budget? Reach out to your siblings (or cousins or whoever) and see if they’d be willing to split the cost.
Interac e-Transfer is a great tool to help split the bill. You can now request money, which means that if you’re the one buying the gift, you can easily remind everyone else how much they owe.
You’re walking around, being the best Santa you can be, picking out glorious gift after glorious gift, when you see something that you want. For you.
Or you’re standing in line at Starbucks and they have a beautiful limited edition mug. And it’s 10% off!
Christmas is still 6 weeks away and it’s a silly gift to ask for anyway so you decide you’re going to #treatyourself.
There’s nothing wrong with buying something special for yourself but what tends to happen around the holiday season is we feel like we have a reason to give ourselves a little extra permission.
As a consequence, these little indulgences add up.
If self-gifting is important to you (there’s nothing wrong with that), why not add it to your budget?
Avoid impulse and last-minute shopping
Nothing will drain your budget faster than going out without a plan. Something that seems like a good deal on December 23 probably isn’t.
Or, if you’ve made your list and come up with gift ideas for everybody on it and you run into a gift that you just have to get because Oh my Gawd it would be so perfect, take a minute to consider it.
Often we go into shopping mode and pick up whatever seems good and figure out who it’s going to go to later.
But if you are resolved to stick to your budget so you can enjoy the holidays this year without going into the hole, we recommend you don’t do that.
Make your plan and stick to it. It might take some of the fun out of shopping but so does getting in debt.
Related Reading: 11 Ways To Stick To Your Budget
Schedule a post-holiday post-mortem with yourself
A post-mortem is event planning lingo. Agencies use it as well. After an event or a project, the key stakeholders will get together and go over what went well, what didn’t, what could be improved on and what shouldn’t be changed.
They look at their expectations before the event or the project and compare them with the results in order to identify recurring issues that could be better managed in the future.
The rules of a debrief like this are simple: Tough on Issues, Kind on People. And those are good rules for you to keep for yourself.
Put it in your calendar right now to have a holiday post-mortem in early January.
Choose a time that works well for you. The point is to close the books on your holiday spending, understand how much you spent and acknowledge how you feel about it.
Then you can start planning that day for next year. Many of us start the New Year with a resolution to be better with our finances. Your holiday debrief can be your first step and your first victory towards that goal.
Help your future self out.
Track your spending now. It’s a great habit to get into regardless of the season, but make the best use of your time for your appointment with yourself or with your advisor.
If you have to spend most of the time hunting down all your expenses, you’re going to lose some precious brain power that could be put to better use.
Plus, tracking your spending over the course of 6-8 weeks is a fantastic way for you to build that as a habit that you can then maintain past the holiday season!
So you’re saving time, building healthy habits and ultimately saving money. Who said budgeting wasn’t fun?
Surviving the holidays: you can do it
The holidays can be hard and doing it on a budget is not easy: there are often a lot of expectations to navigate and nobody wants to be the Christmas grinch who spoiled everybody’s fun.
The struggle to find the balance between Scrooge and Oprah is one we all struggle with and that’s the last piece of encouragement we can give.
You are not alone. And you can do it.
You’ve learned to:
- Create a simple budget you can stick to
- Automate your savings
- Track your spending
- Adjust your budget to better fit your habits
We’ve also identified a few strategies to help you stick to the budget you’ve made.
The holidays are a time to be with the people you love, not to wonder how long you’ll be paying for all this joy.
Creating a budget is one of the best ways you can remove a large chunk of the anxiety that comes with the season and to enjoy the experiences you get to share with your loved ones.